Gen-Z: the Next Generation of Entrepreneurs

Gen-Z aren’t just the newest cohort entering the workforce, they’re reshaping what business looks like. From side-hustles and social commerce to values-driven brands and rapid adoption of AI, this generation is turning entrepreneurial ambition into action. Below we pull together the most important numbers, describe the landscape they’re stepping into, and explain what Gen-Z founders bring (and what they’ll need to scale).

Hard numbers that matter

• A large share of Gen-Z express a desire to run their own business: one widely cited study found around four in five Gen-Zers say they want to own their own company at some point.
• Young people are starting businesses at higher rates than older cohorts: the Global Entrepreneurship Monitor’s U.S. reporting showed nearly one quarter (24%) of 18–24-year-olds were actively entrepreneurial (either starting or running a new business).
• Gen-Z and millennials emphasise growth, learning and meaningful work, Deloitte’s 2025 Global Gen-Z & Millennial Survey highlights that these cohorts prioritise development and purpose alongside pay.
• Many Gen-Zers are already combining full-time jobs with side businesses: surveys report around one in five are employed full-time while running a side hustle, and a small but growing share are fully self-employed.
• At the same time, rapid AI adoption and automation are reshaping entry-level roles and the jobs market, with employers increasingly using AI tools that could both create opportunity and raise barriers for inexperienced hires.

The landscape Gen-Z is entering

1. More opportunity – and higher expectations. Global venture capital and private funding remain plentiful compared with a decade ago, but investors expect traction: MVPs, early revenue and demonstrable metrics are often required before serious cheques appear. This favours founders who can move fast, show product-market fit, or bring demonstrable audience traction.
2. A social + creator economy. Platforms (TikTok, Instagram, social commerce startups) give founders direct access to customers and a low-cost way to test product ideas. Marketing and community building are now powerful competitive advantages for first-time founders.
3. Tech and AI as force multipliers. Gen-Z are digital natives: they adopt tools quickly, treat AI as a utility rather than a threat, and can automate workflows that previously required large teams. That accelerates build cycles, but it also raises the bar for differentiation.
4. Purpose sells. Consumers, especially younger consumers, expect brands to hold values and take stands on climate, inclusion and workplace practices. Purpose is not decorative; it’s part of product positioning and talent attraction.

What Gen-Z founders bring to the table

• Audience fluency. They understand where attention lives (short video, livestreams, creators) and can build brands organically through community.
• Lean, test-and-iterate product approaches. Many start with side-hustles or creator followings and scale what works, low burn, high feedback loops.
• Values and transparency. They prize authenticity; this helps recruitment, marketing and customer loyalty when communicated well.
• Comfort with tech and automation. From no-code stacks to AI assistants, Gen-Z founders can prototype faster and run efficient operations earlier.

The real barriers (and how to reduce them)

• Access to capital and mentors. Access to capital and mentors. Many investors still prefer experienced or repeat founders. Solutions: micro-funds for first-time founders, accelerator places dedicated to Gen-Z, and mentor networks that pair young founders with operational experience. Startups with mentors are 70% more likely to survive for more than 5 years.
• Signal vs noise. Signal vs. noise. With so many creator-led businesses emerging, standing out requires measurable traction (retention, CAC, early revenues). Advisers should help Gen-Z founders translate follower counts into customer economics.
• Regulatory and operational know-how. Regulatory and operational know-how. Taxes, employment law, IP, and commercial contracts can trip up first businesses. Practical, bite-sized education and accessible legal templates reduce friction.
• Outsourcing for scale and efficiency. To maintain a lean structure and focus on their core product, young founders can’t afford to get bogged down in non-core tasks like finance or HR. Solutions: Encourage the strategic use of outsourcing and specialised fractional services. This allows founders to access specialised expertise immediately and scale operations faster without the significant upfront cost and complexity of hiring full-time staff. Over 37% of small businesses already outsource at least one function to cut costs and boost growth.
• AI dynamics. Automation may hollow out some entry-level jobs, but it also creates niches for founders who can productise new workflows. Encourage skills that combine domain expertise with tech fluency.

What employers, investors and advisers should do now

• Employers: Treat Gen-Z talent as entrepreneurial assets. Offer flexible career paths, secondments into product/commerce teams, and support for staff side-projects where appropriate, these can be talent magnets and internal innovation engines.
• Investors: Create low-barrier entry points (smaller pre-seed checks, rolling SAFE facilities, founder-friendly terms) and expand networks of Gen-Z mentors. Look beyond polished pitch decks: traction in community and creator audiences can be an early signal of product-market fit.
• Advisers / intermediaries (that’s where Factotum comes in): Offer practical playbooks, accounting, simple unit economics templates, step-by-step incorporation guides and short workshops on turning an audience into revenue. Help founders build credible financial narratives even when revenues are small.

Quick checklist for a Gen-Z founder

• Clarity on Economics: Show two things clearly: who your customers are and your path to positive customer economics.
• Measurable Traction: Use social proof (community metrics, engagement) and translate that into measurable customer retention and conversion rates.
• AI Leverage: Productise new workflows using AI and automate repetitive non-core tasks early.
• Scale Smartly: Find one mentor with a track record of scaling operations or leverage fractional/outsourced expertise for operational gaps. We can help.

Final thought

Gen-Z entrepreneurs are not a fad, they represent a structural shift in how businesses start, build and find customers. They combine purpose, platform fluency and low-cost experimentation. But ambition alone won’t be enough: the ecosystem, from investors to professional advisers, must adapt to offer the right mix of capital, mentorship and practical scaffolding. When that happens, the next decade could see a wave of resilient, digitally native companies that grow differently, leaner, community-first and values-led.